The road to single-payer: the Insurance Exchange

There are a lot of reasons not to like a single-payer health care program, but look at this from this WCAX report:

The bill that passed the House sets up what’s called an insurance exchange. Vermont is using the one already working in Massachusetts as a model. Residents there go online to buy their insurance coverage from a government-run site where they can compare prices and plan features. The federal health reform law says every state must have an exchange in place by 2014.

“What we are proposing in Vermont is that this be the mechanism through which most Vermonters purchase health insurance in order to realize administrative savings and simplify and make more comprehensible how you choose health insurance options,” said Anya Rader Wallack, the special assistant to the governor on health care.

But then we read this…

…in 2014 they [interviewed family] will still get their coverage through their employer. But most employers will have to choose from private plans selected by the state.

The insurance exchange is touted as offering consumers a choice in selecting our health insurance, and yet the state (or this yet-to-be-named Jedi Council of a health board) will be selecting who we get to select from. Are the consumers really the ones making the choice?

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3 Responses to “The road to single-payer: the Insurance Exchange”

The exchanges will be an administrative body responsible for providing a wide range of insurance products (all from private insurers) for people to choose from. There will be some rules about essential benefits that the plans sold on the exchange must provide. But you can bet, with the many millions of new “lives” that insurance carriers can access on the exchanges, every insurance company in the country will create plans that they will sell on the state exchanges. Exchanges are a great way for people to buy insurance, meanwhile – they make it easy to compare plans “side by side” (kinda like comparing airplane ticket prices on Expedia) and they make the insurance providers compete against each other – helping to keep premiums in line.

Many small companies will be able to use the exchanges to provide insurance for their employees – it will be a boon to them too.

It’s not clear yet whether “government” (state or federal) will actually run the exchanges – they could be managed by a nonprofit association set up by the state, for example, rather than by a department within the state government. That would probably be a more efficient way to run them, since government contracting rules & decision making processes are so complex.

Exchanges are one part of the healthcare reform bill that everyone should be rooting for. That, and making all insurance guaranteed issue, and creating standardized plans that are easy to compare “apples to apples.”

The idea of an exchange, or market, for selecting health insurance is great. It’s in the implementation of it where a lot of questions get raised.

In the story I cite, it mentions that the site where folks would browse the different plans would be “government-run”. I don’t like that at all.

I’m not totally up on my health insurance history here in the state of Vermont, but there are basically two or three non-state run health insurance companies from which we can choose now. I believe it was the regulations imposed by the succession of Kunin and Dean that chased the other companies out of the state.

There has been little or no competition for health insurance customers for quite some time in Vermont. Just opening up the market for other insurance companies in Vermont would probably improve the current “system” and that would probably require a hard look at the regulations on the industry imposed by Montpelier.

If something is government-run, then there is all too much opportunity for abuse. It may start as abuse to score political points, but all it really ends up doing is hurting citizens whose hands are not directly on the levers of power.

Well, Vermont is its own beast for sure. But as for “abuse” – that is not limited to government; plenty of room for all kinds of nasty shenanigans in the private sector too (in other words, people without scruples are found everywhere). At any rate, the exchanges set up by PPACA are supposed to be an open marketplace where private insurance companies can hawk their plans. How Vermont ends up implementing that will no doubt be uniquely Vermontian. 🙂 Thanks for the reply to my reply.